Sentiment has been positive after the authorities started to
take some bold steps to counter a balance of payments and credit
problem.

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Sri Lanka's new government is drafting reforms aimed at
simplifying taxes, widening the tax base and increasing
compliance, Finance Minister Ravi Karunanayake said on
Wednesday, two days after his ministry said the country's tax
revenue in the first seven months jumped 23 percent to 769.8
billion rupees from a year earlier.

The benchmark Colombo stock index ended 0.02 percent
up at 6,589.71, hovering around its highest close since May 20
hit on Tuesday.

"There was some profit-taking due to month-end settling
though the market is still on positive sentiment," said Prashan
Fernando, COO at Acuity Stockbrokers.

Foreign investors sold a net 78.4 million rupees worth of
shares on Thursday, extending the outflow so far this year to
3.94 billion rupees worth of shares. They are, however, net
buyers of 714.4 million rupees worth of equities so far this
month.

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Turnover stood at 624.5 million rupees ($4.30 million),
below this year's daily average of around 750 million rupees.